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Chestermere’s City Administration is under attack for releasing the City’s 2021 Financial Statement without the auditor’s signature. The media appear to bounce again releasing stories based on partial facts and innuendoes, without waiting to hear the entire story.

The truth: City Administration released the 2021 Audited City Financial Statement based on professional advice and in an attempt to meet requirements imposed upon the City by its regulator. City Administration never intended to mislead residents, but were limited in what they could report, due to the ongoing potential legal issues between KMPG and the City which are currently before the City’s lawyers and discussed in further detail below.

The issue at hand: KPMG does not want City Administration posting the 2021 Audited City Financials on the city website, even though KPMG asked Council to pass a motion to approve the audit report, as presented in camera on November 29th, 2022. The City’s position – the Audit was complete, or nearly so. The sticking point, KPMG did not sign the final Audit Report.

Based on professional advice and consideration, City Administration was comfortable and confident posting the 2021 City Financial Statement because the only outstanding issue was a signature. Administration followed the proper auditing process. However, KPMG would not provide their signature due to reasons which are still the subject of ongoing scrutiny of the City’s legal counsel . This was a situation City Administration could not control.

For reasons unknown to City Administration, KPMG was very slow in completing the 2021 City Financial Audit. They were due to be completed by end of May 2022, but were not completed until November 2022. The City’s Finance team worked diligently to support KPMG to complete during the Audit. In the end, the City believed KPMG was satisfied, and we started the process to close the Audit. The Process went as follows:

1. KPMG sent their draft 360 Audit Report, with details of their Audit findings, to the City Administration to review. City Administration did not have issues with the 360 Audit Report.

2. KPMG signed the 360 Audit Report and presented it to the City’s Audit Committee, which includes a summary of the 2021 City Financial Statement. Counsellor Sandy Johal Watt and Councellor Stephen Hanely were in attendance as they are on the Audit Committee. The Audit Committee did not find any issues and signed off on the 360 Report.

3. Three business days later, Senior Finance Manager Ann Thai presented the 2021 City Financial Statement to Council with KPMG in attendance. Neither KPMG, nor Council, raised any concerns regarding that presentation.

4. Following the presentation to Council, KPMG asked Mayor Colvin, Councellor Sandy Johal-Watt, Councellor Stephen Hanely, Acting City Director Kim Wallace and Interim City Director Cam Wong to sign the 2021 City Financials in good faith.

5. Council motion to accept the 2021 City Financial Statement are as follows:


Moved by Deputy Mayor Mel Foat
Motion that Council accept the 2021 Financial Statements

Motion Allowed by the Official Administrator from Municipal Affairs


Moved by Deputy Mayor Mel Foat
Motion for Council to direct administration to sign off on the 2021 financial statements

Motion Allowed by the Official Administrator from Municipal Affairs

6. The final step in the process, after Council accepted the City Financial Statement was for KPMG to sign their Audit Report for the 2021 City Financial Statement, the same day as the council presentation. KPMG later that day, refused to sign, stating they needed to review the DRAFT version of the Municipal Inspection Report before they would sign off on the audit.

7. In an effort to convince KPMG, the following day, City Administration sent a letter from their legal counsel confirming the Draft Municipal Inspection did not include information that would impact the 2021 Financial statement.

8. The next day KPMG resigned without signing the report. The City is currently considering its legal options regarding this resignation.

It must be noted: The 2021 financial statement under review is primarily from the previous Council not the current Council. The current council was in office for 2 months during 2021.

The Sticking Point – 99.99% Complete but KPMG Refused to Sign

City Administration was under strict instructions by Municipal Affairs that the confidential DRAFT Municipal Inspection Report could not be shared. Each person that viewed the report was given a unique password, it could not be printed, edited or shared. It was paramount confidentiality be maintained.

Administration’s hands have been tied to provide more information but due to the actions of KPMG:

1. Without a signed audited report, City Administration could not submit the 2021 Financial Statement to the Government, missing opportunities for potential grants.

2. Municipal Affairs thus far has not provided an exception, even though it was clear that the audit situation was due to the Municipal Inspection.

3. Without KPMG’s cooperation, the City has encountered significant difficulty in contracting another Auditing firm to take over, and a new Audit has to be completed.

As a result of the above, City Administration is backed into a corner until the Municipal Inspection Report is complete. As this matter may go before the Courts, City Administration has been advised to not release anymore information regarding the foregoing other than what is set out above.

Finally: Through all the contentious issues City Administration has faced due to the Municipal Inspection, the most disappointing is the apparent confidential leaking of information. Administration was alarmed today when they learned the private letter from KPMG was released to the press within 90 minutes of it being delivered into top Officials In-boxes. City Administration and the majority of Senior Officials are working very hard to work through these difficult times, yet there appear to be some, for whatever reason, that are determined make it worse for everyone.

Soon City Administration expects to be clear of these issues, but until then, Administration is asking for residents patience and understanding.